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Wednesday, November 30, 2016

Here’s one way of thinking about Bill Davidow’s seemingly insoluble problem of insufficient jobs.

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There was once a country with a well-functioning economy. It enjoyed a virtuous circle of increasing prosperity for all. Firms were well managed and drew on the full talents of workers. Workers became steadily more productive. Innovation flourished. Customers were thrilled. Firms made more money. The gains in productivity were shared fairly with the managers and the workers who created them.

The increased pay for citizens enabled them to spend more on products and services. As they spent more, firms were inclined to invest more. Some workers used the money to launch new businesses, some of which grew into big businesses.

As banks made money by financing investments, they were highly respected members of the community. Investments in turn generated more jobs for workers. Workers became more productive and had even more resources to spend. Many more new businesses were created. As the economy grew, everyone was better off. The future looked bright.

Then something went wrong. It was as if a strange new set of economic diseases began to infect everything. As globalization, deregulation and new technology empowered customers, firms found it more and more difficult to monetize gains in productivity. Customers increasingly demanded and extracted improvements for free.

Firms focused more closely on their own gain. Gains in productivity were not shared with workers. As salaries of workers stagnated, they became dispirited. Citizens had less money to spend. As firms perceived a lack of demand, they invested less in new products and services. Real economic growth slowed.

Because salaries were stagnant, there was no money for workers to start small businesses—formerly the main source of new jobs.

The economy went into a spiral of decline. To make executives more entrepreneurial, firms gave them generous compensation in the form of stock. But instead of becoming more entrepreneurial, executives extracted resources from their firms and handed them back to the owners—the shareholders and themselves.

As the economy slowed, there was less need for banks to finance investment. So bankers began making money from gambling, rather than investing in the real economy. The financial sector and the stock market grew but because they weren’t grounded in real products and services, real GDP stagnated and there were increasingly severe financial crashes. As bankers profited from the ensuing volatility and slid into rampant illegality, they became disrespected members of society.

As the economy slowed and firms found it steadily more difficult to make money, they resorted to shipping jobs overseas in a desperate effort to cut costs and silence workers’ unions. In the short term, they were rewarded by the stock market for cutting costs, but the firms soon found that they had undermined their own long-term capacity to evolve and grow their businesses. When many firms did this, whole industries were lost and could not be retrieved. As a result, the sectors where the country could compete steadily narrowed.

As a result, in a further effort to cut costs, firms invested less in shared resourcessuch as pools of skilled labor, supplier networks, an educated populace, and the physical and technical infrastructure on which competitiveness ultimately depends.

These management actions in turn gave rise to serious social problems (loss of jobs, stagnating income, growing inequality) and eventually a decline of the public sector (an inability to fund health and pensions, or investments in the commons such as infrastructure, training, education, and basic research, fields that the private sector had abandoned.)

As new firms used new technology to produce the same output with much fewer workers, and as rate of new business creation declined, the prospect of not creating enough jobs for the entire population became a serious prospect. Most of the new jobs were in low-paying local service jobs not subject to international competition.

Because the education system was focused on producing students who could regurgitate the right answers, rather than ask the right questions, even graduates were not well suited to the emerging entrepreneurial economy.

As the future for average citizens was bleak, and income inequality increased, social unrest spread. In politics, demagogues emerged, proposing desperate remedies like “erecting trade barriers”, “getting rid of immigrants” “taxing the rich,” or “printing money.” As social cohesion frayed, thoughtful observers wondered whether the country could even survive.

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No economy has ever functioned with the uniform growth and prosperity that I have just described. Nor are the economic diseases of our world today as uniformly grim and dispiriting as the misfortunes I have just recorded. Yet every one of these phenomena has been happening in significant parts of the economy today. An economic horror story has been unfolding almost unnoticed, and this imagined disaster is not far from our reality.

I believe that Bill’s problem of the shortage of new jobs needs to be seen in this wider context of an unfolding economic disaster that is only partly related to problem cases like the newspaper industry, which inexplicably and nonchalantly failed to take action to deal with the obvious pending problem of technological disruption.

What we have is a whole series of problems emerging simultaneously causing economic stagnation. In this context, no one single action will solve the problem of jobs, which is part of a bigger set of problems.

Great article posted by Eric Tjoeng of BGES - founder of the BBG/BGES Paramatta Forum

Great collaboration between BBG & BGES at the Parramatta Business Forum.

One of the new business paradigms of the New Age is to “Collaborate and Flourish”.

Facing much-accelerated business disruptions and increased complexities of current business operating requirements, to be successful and sustainable, business services providers need to work with one another to provide valuable services and to explore and maintain sustainability, as well as to innovate for prosperity.

“In a world where media fragmentation is making it increasingly expensive to generate new leads and the ever-increasing demands on SME owners leave most of us without the time or energy to make cold calls or attend “yet another fruitless networking event”; Business Builders Group offers new hope.

Built by referral marketing specialists, run by professional business development experts and supported by best-of-breed referral tools and training resources; Business Builders Group is re-defining the business growth process.

Monday, November 21, 2016

I have just seen this inspiring movie about Owen Susskind - an autistic child and now young man - who learnt to connect through Disney Movies.

He doesn't have a disability .... as Chally Grundwag puts it - he has a "coolability" ... with guidance and support he has been able to add so much value, hope and joy to so many.

Humans with coolabilities have got massive strengths and many ways that they can add a positive influence to society. It is these cool people - who bring colour and humanity to our race, and brings out the best, and yes, also the worst of ourseselves.

It is these humans who will provide a key to the future of employment over the next 100 years.

As congressman Bill Foster said at the I4J forum on Tuesday (a hackathon laying the foundation of a pathway for technology creating jobs bs destroying jobs! ) - only 15% of the workforce supported by AI and automation, will be needed to provide for all our needs - what will the 85% do?

Maybe providing support, guidance and teaching and being of service to others?

Last week I attended the ‘Innovation for Jobs’ (i4j) Leadership Forum in Washington DC where I had the privilege of hacking unemployment with sixty other thought leaders. It was Tuesday morning that I arrived at Google’s office where our task of disrupting unemployment spread out against the dawning day like a patient etherized upon a table.

Admittedly, we live in a worried world. Financial instability, overconsumption, pollution, energy demands, growing inequality and unemployment… all created by humans and all solvable. But we are locked into a culture of short-term thinking, a quick fix, a fast buck. And most grand ideological projects disappear into a thousand points of contention because experts are firmly tied to existing power structures.

Congressman Bill Foster likened jobs on Wall Street to rural communities that found themselves in crumbling economies two generations ago. He reinforced that artificial intelligence is taking over routine analytics on Wall Street as well as document review in the legal profession because document research is now completely automated.

Employment is changing. Definitions are changing. So are business models. It is unclear what means exist for genuine reform. But can we find smarter ways and make discoveries for a brighter future? That was the objective of the day.

How can we make the ‘human economy’ flourish? There is no magic solution. It is a big deal and coming at us faster than anything. And in the center of it all we need to think about what it means to be human and what our goals are.

In the shadow of Capitol Hill, the White House and all that it currently represents, I started to understand that what we have become is the price that we paid to get what we used to want, as Mignon McLaughlin so succinctly prophesied.

David Nordfors co-founder and co-chair (together with Vint Cerf) of i4j talked about the possibility of a solution by re-framing the problem. He notes that currently, we ask “what is the most efficient way I can spend money”. But perhaps we can also earn money by asking a different question – how much value can this person create for others? What would happen if we started a business where I serve other people by maximizing their value for others?

Why not create a matching engine to determine how much value someone in the world is willing to pay for the combination of efficient spending and maximizing value for others? Nordfors suggests that such companies would actually grow the economy and they would earn by helping people to earn. And the service they would offer would satisfy the need for earning a living and a job becomes a service and the labour market becomes a service market, which has an enormous growth potential because it is a value-serve. And he suggests that we call this a human to human economy.

What is the metric? A human to human win.

Pete Hartigan defined the current opportunity as one where you can create businesses that help local communities and that doing so is actually how to enable those communities to become more profitable. Hartigan has been working on his thesis since 2010 and suggests that this is the magic syllogism. Pete believes that if you make people money and give them reputation, you’ll get engagement and activity. He challenged us: “…perhaps we need to create a type of social currency, rather than a distributed coalition of the people”.

We need more of Nordfors and Hartigan’s consistent far-sighted action and extended thinking. Else we are in danger of losing our sense optimism

Kurt Lewin, recognized as the founder of social psychology understood change well. His early model of change described it as a three-stage process. The first stage he called “unfreezing”. It involved overcoming inertia and dismantling the existing “mind-set”. In the second stage the change occurs. This is typically a period of confusion and transition. We are aware that the old ways are being challenged but we do not have a clear picture as to what we are replacing them with yet. The third and final stage he called “freezing”. In the final stage the new mindset crystallizes and one’s comfort level returns to previous levels

It was Lewin who wisely said: “If you want to truly understand something, try to change it”. Although we are a long way from a new mindset, we are on the path. Let’s try to understand unemployment. Let’s try to change it.

Thank you David, Thank you Vint. Thank you i4J. You are beginning to change the world.

Wednesday, November 2, 2016

Stephen Elop, Group Executive, Technology, Innovation and Strategy at Telstra, says his time as CEO at Nokia taught him a number of lessons about change. Here he looks at what the Aussie ICT sector can do to thrive.

If you go back to 1955, the life expectancy of a business was 75 years. Today, a large business is expected to exist for about 15 years. Of the Fortune 500 in 1955, 88 per cent of businesses no longer exist.

There’s plenty that has changed in that time, but it’s us – the technology industry – that has driven the pace of change more than any other. Despite this, recent research from Telstra Wholesale, Powering your business through relentless change, shows that we’re still shying away from the pain that comes from being agile and managing disruption ourselves.

In the years I’ve worked with Australian companies, I’ve seen them deal with the same challenges that companies across the world face. But because Australia, in some ways, is an island both literally and figuratively, there may be some circumstances where it takes a bit longer for some disruption from afar to come to Australia. This gives us a huge opportunity to get ahead of those changes, but many businesses still aren’t reacting.

Conversely, disrupters have a mindset that they’re going to deliver a much better customer experience using a very different business model. They have that mindset and they believe in it and they’re passionate about it, and so they drive hard on it. With that mindset, an amazing amount of work is possible.

Make the most of partners

In Australia, perhaps more than in a much larger country, partnerships are fundamental. It’s a relatively small market given the population size and it has some unique challenges like the breadth of geography and its distance from other major centres.

Because of those factors, I believe that the Australian businesses that succeed are those that become very good at curating capabilities into the country. These companies see the importance of getting the balance between the need to create technology versus curating technology right for the future. An example is Telstra’s multi-cloud strategy where we are partnering with companies like Amazon and Microsoft to present to our customers a variety of cloud-based capabilities rather than building it ourselves. Each of *Amazon, *Microsoft, *Google and a number of other companies are investing heavily in this technology. What we are doing is working closely with these partners to bring the best that the world has to offer to our customers both locally and globally.

Keep pushing the boundaries

It’s essential to constantly reinvent yourself. A decade or so ago, Telstra’s fixed line business was the cornerstone of our business. In the next five years, nbn will change the state of play dramatically. We have a strong market position and good financial resources, but it’s time we start asking how we take it to the next level. How do we change and lead the market?

So while the current business model is very good, we’re going to place some big bets on technologies that we believe in and disrupt our own model.

Because if we don’t, someone will. And they’ll succeed as a result.

WHAT YOU NEED TO KNOW:

As former CEO of Nokia, Stephen Elop has experienced extreme business change, and recognises behaviours which hold companies back. In this article he advocates: